Norfund Expands FinTech Investments to Enhance Financial Inclusion

July 3, 2024

Norfund today announces its support with a $20 million commitment to a new Apis fund – the Apis Growth Markets Fund III. Apis Partners LLP (“Apis”) is a private equity firm investing in high-growth, tech-enabled financial services companies globally.

TymeBank is a portfolio company in one of Apis’s previous Growth Markets Funds. It is currently one of the world’s fastest-growing digitalt banks, with over 9 million customers since launching in February 2019. The bank is founded on simplicity, transparency and affordability and is designed to make digital banking accessible and affordable to all South Africans across the economic spectrum. TymeBank has been recognised as South Africa’s top bank in the Forbes list over the world’s best banks for 2024.

Apis’ previous two Growth Markets Funds, which collectively raised commitments of around $850 million, have a proven track record of delivering both impactful and financial results. The new Apis fund will continue to focus on pivotal trends such as Cashless Payments, Embedded Finance, and Financial Inclusion, all of which enhance livelihoods in Africa and South/Southeast Asia.

“We are impressed by Apis’ professionalism and expertise in guiding the growth of promising mature FinTechs through its active and invaluable mentorship. Apis and Norfund share a strong commitment to improving financial inclusion in emerging markets. This partnership enables Norfund to develop our internal fintech expertise and offers opportunities for direct investments through co-investing with the fund.”

Espen Froyn , Senior Vice President for FI Africa in Norfund

Norfund’s fintech investment strategy

Recognizing the crucial role of Financial Technology (“FinTech”) in improving financial inclusion and reaching economically disadvantaged individuals and small businesses, Norfund broadened its investment focus in 2022 to include FinTech companies alongside banks, microfinance and other financial institutions. Norfund now actively supports financial inclusion-oriented FinTechs engaging in digital lending, neobanking, embedded finance, insurtech, and payment solutions across sub-Saharan Africa and Southeast Asia.

Norfund typically provides direct investments in high-quality FinTech companies, offering between $5-20 million in loans and equity to firms in their early growth stages, generally from Series A onwards. Since establishing the FinTech Investment Strategy, Norfund has invested in Wave Money, Lula Lend, Amartha, Funding Societies, and AwanTunai. Besides direct investment, Norfund also works with FinTech funds such as Quona Capital and Integra Partners, to extend its reach to promising early-phase FinTech companies.

Collaborating with Apis to augment Norfund’s FinTech investment strategy

Norfund’s investment in Apis Growth Markets Fund III represents a strategic decision to further diversify its portfolio into a broader set of mature and high-growth FinTechs that support individuals, entrepreneurs and established businesses with affordable and accessible financial services in emerging markets. Norfund’s commitment will help Apis reach its target fund size, especially at a time when fundraising has been challenging globally and particularly for emerging markets managers. The partnership will also provide Norfund with valuable insights from a leading industry investor.

“Apis’ expertise in payment solutions and embedded finance is profound. Seamless and cashless digital payments can significantly boost productivity and enhance digital inclusion, an area where Apis truly excels. In addition, we recognize the vital role of embedded finance in helping entrepreneurs and small businesses access the productive assets they need to thrive. We look forward to seeing Apis bring essential capital to these crucial segments,”says Investment Manager Kathy Chang (middle).